2017 (6) TMI 860 - AT - Service Tax

Recovery proceedings against a dead person - penalty u/s 78 - Held that - the appellant was a sole proprietorship concern and Shri William D Souza was the sole proprietor who died on 30.12.2011 when the appeal was pending before the Commissioner (Appeals) - reliance was placed in the case of Shabina Abraham Vs. Collector of CE & Customs 2015 (7) TMI 1036 - SUPREME COURT , where it was held that no recovery proceedings can be initiated against the dead person - present appeal abates.

Summary

Issues:
1. Appeal against rejection of appeal by Commissioner (Appeals)
2. Liability of deceased sole proprietor for service tax
3. Applicability of Rule 22 of CESTAT Procedure Rules

Analysis:
1. The appeal was filed against the rejection of the appellant's appeal by the Commissioner (Appeals) in a case involving service tax liability. The appellant, a sole proprietorship concern, was engaged in providing various services chargeable to service tax. The impugned order confirmed a demand for service tax, interest, and penalties. The appellant contended that the order was passed against a deceased person, the sole proprietor, and therefore, the appeal abated.

2. The appellant argued that no recovery proceedings could be initiated against a deceased person as it would violate the principles of natural justice. Citing various legal precedents, the appellant's consultant emphasized that the appeal abated upon the death of the sole proprietor as per Rule 22 of the CESTAT Procedure Rules. The appellant's legal representative expressed disinterest in pursuing the appeal due to the proprietor's demise.

3. The respondent, however, maintained that the liabilities of the deceased could be recovered from the legal representatives. After hearing both parties and examining the records, the Tribunal found that the sole proprietor had passed away while the appeal was pending. Relying on the legal principles and precedents cited, the Tribunal held that no recovery proceedings could be initiated against a deceased person. Therefore, the Tribunal concluded that the appeal abated upon the sole proprietor's death and disposed of the case accordingly.

This judgment highlights the legal intricacies surrounding the liability of a deceased sole proprietor for service tax, the abatement of appeals in such cases as per Rule 22 of the CESTAT Procedure Rules, and the application of principles of natural justice in legal proceedings involving deceased individuals.